How the GOP House health bill would affect you

By Larry Light

Updated on: May 5, 2017 / 6:00 AM
/ MoneyWatch

House passes health care

When Republicans in the House voted Thursday to repeal the Affordable Care Act and replace it with their own version, it marked a sea change in what Americans can expect for health insurance coverage. That is, if the plan gets through the Senate. The changes in the House plan are profound.

The House Republican health care bill, called the American Health Care Act, marked a victory for President Donald Trump and House Speaker Paul Ryan, R-Wisconsin, who shepherded the measure through a contentious chamber, after pulling an earlier version last month for want of sufficient votes.

"I went through two years of campaigning and I'm telling you, no matter where I went, people were suffering so badly with the ravages of Obamacare," President Trump said at a ceremony in the White House Rose Garden after the bill passed. Mr. Trump decried higher premiums and deductibles under his predecessor's signal legislative achievement, as well as the exit of health insurers from a number of markets, limiting people's choices for coverage.

How would GOP health care bill impact people?

How the House legislation will play in the Senate, where the Republican majority is much slimmer, remains to be seen. Several GOP senators have expressed qualms about the House bill. Democrats are virtually united in their opposition to the bid to revamp Obamacare. The tight House vote that secured the GOP bill's passage, 217-213, was close to party lines, but with 20 Republicans voting no along with every Democrat.

Hospitals and doctors are working to defeat the plan, which they think will deprive them of lucrative Medicaid subsidies and increase the volume of patients who can't pay their medical bills. "If enacted, this bill will stand as the biggest assault on ordinary Americans," said Robert Greenstein, president of the liberal Center on Budget and Policy Priorities.

Here are some of the legislation's more prominent features and how -- if they make it through the rest of the lawmaking gauntlet -- they may end up affecting you:

Preexisting conditions. This is the biggest flash point in the health care debate. Under Obamacare, insurers were forbidden from refusing coverage to people who already had medical conditions, like AIDS, cancer or heart problems. Also under the ACA, insurers must charge policyholders with prior ailments the same as those without them. While various polls found negative sentiment about Obamacare overall, the preexisting-condition ban was enormously popular. Small wonder that Republicans made sure to retain this provision, sort of (see high-risk pools).

The House-passed plan would permit states to apply for waivers that allow them to require higher premiums than under Obamacare. The House bill also would permit insurers to charge 30 percent more to those who have let their coverage lapse for more than 63 days. This is aimed at discouraging people who sign up for insurance only after an accident or illness strikes, an action that puts a strain on the system.

High-risk pools. Another way that House Republicans seek to limit the financial pain of the changes: State-run "high-risk pools" to help people who already have expensive medical conditions cope. If a state waived the Obamacare rule that forbids charging sick patients higher premiums -- a waiver that the House plan allows -- the state's high-risk pool could try to make up the difference. The bill earmarks $138 billion in aid to subsidize such efforts.

Next steps for GOP health care plan

How that would work in practice is an open question. Before the ACA was enacted, 35 states established their own high-risk pools, but an analysis by the Kaiser Family Foundation showed that the results were discouraging.

Nearly all the states barred patients with preexisting conditions from pool coverage for six months to a year. Plus, premiums were 150 percent to 200 percent higher than market rates, and deductibles were high -- in 29 states, $1,000 or more, and in 10 states, $5,000 and up.

A nationwide system, backed by federal subsidies might fare better. And there may be an ancillary benefit, for healthy people. Speaker Ryan has said by shifting the risk of covering sicker people from insurance rolls to the pools, premium costs for healthier policyholders likely would drop.

Age rating. With Obamacare, insurers can charge older people more than younger -- because medical needs and expenses increase with age -- but it limits the difference in premiums to no more than three times what the young pay. Under the House bill, that would bump up to five times. The reason: Health costs for Americans in their 60s are about five times higher than for those in their 20s.

Medicaid recipients. When the Congressional Budget Office examined the original version of the House bill (it hasn't yet analyzed the version just passed), it estimated that 24 million Americans would be without health coverage a decade following the ACA's repeal. A major factor for that was the expected rollback of Medicaid expansion in the 31 states that opted for it. Under the ACA, the federal government picks up much of the tab to help poor people afford health coverage, with the states paying the rest.

The House bill would keep things status quo until 2020 to give people time to adjust. From that point, no new Medicaid enrollees would be accepted. And people who dropped a policy -- say they got a job with coverage, then lost that job -- would be forbidden reentry.

Trump's health care promise not backed up by GOP bill

The House measure doesn't seek to do away with Medicaid funding, just curbs it. Under Obamacare, federal outlays are open-ended, but the GOP revamp would cap Washington's payments by bundling the money into block grants. That would reduce federal spending on Medicaid by $880 billion over the next decade, the Kaiser Foundation projects.

State Medicaid plans also would no longer have to cover some of Obamacare's essential health benefits, which delivers on a Republican pledge to return more control to the states.

Employer health plans. If Obamacare is replaced, even people covered under employer plans could be affected. Should states permit insurers to offer bargain plans that cover just the minimum benefits, companies might shrink what they offer employees, according to Matthew Fiedler, a health policy analyst at the Brookings Institution, in a recent article.

For instance, Obamacare bans annual and lifetime spending limits. As Fiedler put it: "In the absence of any essential health benefit standards at all, these protections would effectively disappear because they would apply to an empty set of health benefits." Other ACA rules, he noted, such as the ceiling on what patients pay for medical care each year, are linked to the minimum benefits.

Requiring coverage. The House bill would scrap the federal mandate that everyone must enroll in a health insurance program, or pay a penalty on their taxes. Liberal critics of Obamacare said the mandate doesn't charge enough to force reluctant younger people to buy a medical plan. The Congressional Budget Office believes thousands of current Obamacare policyholders would bail out if the House framework prevails.